Loan to its director
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
08 January 2016
Dear Sir,
Whether Private Company can give loan to Director ? Is it possible subject to approval of shareholders ??
Regards,
Sachin
Whether Private Company can give loan to Director ? Is it possible subject to approval of shareholders ??
Regards,
Sachin
08 January 2016
Yes kindly refer to the exemption provided to private companies after amendment in companies act it can give subject to certain limitsNotification currently provides that Section 185 shall not apply to a private company satisfying all of the following conditions:
No body corporate shall have invested any money in the share capital of the company; and
The borrowings of the company from banks, financial institutions or any body corporate shall not not exceed twice the amount of paid-up share capital or INR 500 million – whichever is lower; and
There shall be no subsisting defaults in repayment of such borrowings at the time of making transaction.
No body corporate shall have invested any money in the share capital of the company; and
The borrowings of the company from banks, financial institutions or any body corporate shall not not exceed twice the amount of paid-up share capital or INR 500 million – whichever is lower; and
There shall be no subsisting defaults in repayment of such borrowings at the time of making transaction.
08 January 2016
Thanks Sir. It means within limits specified in exemptions notification private company can grant loan to Director. If it is exceed the Limit, then prohibition on loan to Director.
Querist : Anonymous
Querist :
Anonymous
(Querist)
09 January 2016
Whether Borrowing from banks mention under exemption to private company includes or excludes CC Loan ?
12 January 2016
Provisions related to section 185 shall not applicable to a private company if:
(a) in whose share capital no other body corporate has invested any money;
(b) if the borrowings of such a company from banks or financial institutions or any body corporate is less than twice of its paid up share capital or fifty crore rupees, whichever is lower; and
(c) such a company has no default in repayment of such borrowings subsisting at the time of making transactions under this section.
Thanks
(a) in whose share capital no other body corporate has invested any money;
(b) if the borrowings of such a company from banks or financial institutions or any body corporate is less than twice of its paid up share capital or fifty crore rupees, whichever is lower; and
(c) such a company has no default in repayment of such borrowings subsisting at the time of making transactions under this section.
Thanks
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